Are the bears back in control and could this potentially be the beginning of an absolutely heinous bear market?
Major Signals
- Bitcoin got down to around 32,300 USD yesterday.
- Bitcoin breaks below the symmetrical triangle
- A support floor of 19,000 USD is supposedly hard for the bears.
We’ve had our eyes closely on the charts. And there appears to be a bearish breakdown out of the pennant formation shown in the above image. Though it’s an interesting range as there is a tentative support all the way to about 28,000 USD, chalking up to 30, 000 USD.
There’s a well defined resistance of 40,000 USD to 42,000 USD building on the opposite side. However, the action on this range is unstable. Although a bearish formation was in sight, the bulls stepped back in at the 31,000 USD level. If the bulls are able to push back, the old line of support could flip into new resistance upon backtest, making it harder for the Bitcoin price to move forward. These gaps are certainly things to keep on the radar.
Shifting focus to the CME features chart. There’s a potential bear flag, which looks better defined than on the spot chart. The measured flagpole on this Bitcoin CME features chart is about 42%. If there’s further downward movement, then the target would be at roughly 20,000 USD. And it could slump even lower to 18,200 USD. The reason for that is a possible gap between 20,000 USD and 18, 200 USD. Plus, Bitcoin CME has had a clear history of gap filling.
There’s also a potential macro bearish head and shoulders pattern. The measured move of this pattern, which is the size of the head to the neckline is roughly a 55% drop down. And puts the ballpark at around 13,000 USD.
Nonetheless, if Bitcoin falls below $20,000, it will be the first time in history that a previous bull cycle's high has been broken.
What are your plans if bitcoin falls below $30,000?
